₦airaland Forum

A VAT could disproportionally affect the poor. Since the tax will be the same for the rich and the poor; the tax will be a higher percentage of an impoverished person’s income. Taxes on food and clothing will keep poor people from obtaining necessary items needed for survival.
Why are the poor disproportionately hurt? A VAT disproportionately hurts the poor because the tax would eat into their already limited income. For example, let’s say you have 2 different people (Tim and Robert) living in Texas both having to pay a value added tax. Let’s assume that the VAT is 5% on all purchases in Texas. Tim makes $50,000 per year and spends $6,000 annually on purchases such as food and clothing. Tim pays $300 per year in value added taxes ($6,000 x 5% = $300). Robert also lives in Texas but he only makes $20,000 per year. He spends $6,000 on purchases as well. He will pay the same $300 VAT as Tim. But are they really paying the same thing? The VAT is only 0.6% of Tim’s income whereas it is 1.5% of Robert’s income. Even though they are both paying the same amount of money, the VAT is a larger percentage of Robert’s money. VAT’s represent a much larger chunk of lower income individual’s money than other individuals.

You could try, as you say, to put it on VAT, sales tax, but again if you look at the effect of sales tax, it's very regressive, it hits the poorest the hardest. It does, I absolutely promise you. Any sales tax, anything that goes on purchases that you make in shops tends to . . . if you look at it, where VAT goes now it doesn't go on food obviously but it goes very, very widely and VAT is a more regressive tax than income tax

"This latest piece of research reinforces what is widely perceived to be the fundamental inequality at the heart of VAT: the poorer pay more of it relative to their incomes than the wealthy," said David Breger of HW Fisher & Company chartered accountants.

simplemach:
APC just running around, cos PDP already took the day.

Nigerians can do better than Jonathan - Yakubu Gowon

Former Nigerian Head of State, General Yakubu Gowon, in a statement issued yesterday described the current leadership of Nigeria as having no vision of the future and incapable of steering Nigeria on the path to greatness. In his words, "We are staggering as if being led by a drunken sailor. When you think we are making progress, we veer off course." He blamed the current state of Nigeria on PDP's inability to push forward leaders with character and integrity. He wondered why Goodluck Jonathan whose wife had a pending case of money laundering and a close associate of a convicted thief who he subsequently pardoned would be allowed to vie let alone occupy the highest office in the land. The statement concluded with advising Nigerians on getting it right in 2015. "We cannot afford to be complacent and vote for incompetence."

She explained that the measures would be implemented from the beginning of the second quarter of 2015 and would considerably boost the ratio of non-oil revenues to oil revenues.....


She said, in the medium term, it would be important to focus on tax policy to see where opportunities lie in order to streamline and rationalise certain taxes and levies, while looking to boost others.

For example, she said, “Nigeria has one of the lowest VAT rates in the world and medium term efforts must involve the legislature to see what opportunities exist with VAT, which largely benefits the states.

“Whilst the state governments get 85 per cent of VAT, the Federal Government gets just 15 per cent. A five per cent increase in VAT rate, for instance, will yield N614bn, most of which will go to the states and local governments.

“I believe that the discipline these new measures impose will go a long way to support the economy and provide Nigeria a responsible pathway to overcoming the limitations of falling oil revenues without disproportionately affecting the poor-to-middle class.”

Nigerians can do better than Jonathan - Yakubu Gowon

Former Nigerian Head of State, General Yakubu Gowon, in a statement issued yesterday described the current leadership of Nigeria as having no vision of the future and incapable of steering Nigeria on the path to greatness. In his words, "We are staggering as if being led by a drunken sailor. When you think we are making progress, we veer off course." He blamed the current state of Nigeria on PDP's inability to push forward leaders with character and integrity. He wondered why Goodluck Jonathan whose wife had a pending case of money laundering and a close associate of a convicted thief who he subsequently pardoned would be allowed to vie let alone occupy the highest office in the land. The statement concluded with advising Nigerians on getting it right in 2015. "We cannot afford to be complacent and vote for incompetence."

"How can President Goodluck Jonathan account for the hurried sharing of
$1bn to the three tiers of government on December 31, 2010? Of what urgent
purpose was the $1bn meant for? Is it for politicking? Is it New Year
bonus? Why was this meeting on the eve of the New Year of the Federation
Accounts Allocation Committee, convened secretly as an emergency
meeting?," the CNPP asked.

The conference added that it was "highly regrettable to finger President
Jonathan whose government is cap in hand on a borrowing binge, to covertly
disburse the Excess Crude Account for political gains."

Alabsworld:
Very true, buhari's utterances caused 2011 post electn crisis nd Obasanjo's utterances is over heating D polity.

Redoil:
for ur own good stop painting gej black and stop pouring dirt on him just to make him lool black and dirty. GUILD OF EDITOR

Redoil:
immidiatly we ran to gej he orderd them to stop the clammping down that the if the army were doing the right thing the media wont complain

Redoil:
did you realy type this poo? Let me dignify you with my expensive response.
it was the army that were complaning of lack of media support in the fight of/against BH and the media were always painting the army black and making it look like BH were wining the war that was when the defense HQ started the clammping down and not gej. you people are ready to go to any length to paint gej black and dirty just to prove ur point. Buhari has already been painted black and dirty for killing jounarlist in their prime using decree 04 as an excuse.

eagleeye2:
Fashola, would have been GMDs best choice. But as a religious bigot, GMD could not see beyond religion. Who even tells him that Christians are even influenced by a Pastor being in politics?
Christian proved that by voting massively for MKO Abiola even though it was a Muslim/Muslim ticket. What makes him think that Christians wouldnt have voted massively again if it were Fashola?
Well, February 2015 is almost here.

Priceless24:
Ok APC governors have all outperformed their PDP counterparts, that's all well and good. We are talking about presidential candidates, yes we know Jonathan is a sissy, but GMB has been jumping from one political party to the other in a bid to become president, does he have the same ideals as these governors you speak of? Or is he just the most formidable opponent the APC could put up against Jonathan?

For Nigeria, the reality of the crisis is that we cannot escape the repercussions of wasting years of boom in the era of high oil prices. Since 1973, Nigeria has experienced six circles oil booms, including 1981, 1990, 2002, 2008 and 2011. The country has been left in shock for these years of wastage without accurate explanation of how the oil booms were managed.
Amid another boom, Nigeria’s external reserves stood at about $62.07billion as at September 2008. One wonders why the country was scraping to manage $37billion at a time when oil prices hovered above $100 per barrel for 41 consecutive months.

Priceless24:
Overchange sef if possible, but what kind of change are we going for? Will APC do any better if their sole aim is just to relieve PDP of power?

Nigeria’s economic managers who failed to diversify away from oil revenues during the boom times are scrambling to respond to twin monetary and fiscal crises amid the collapse of crude prices.

Oil’s 42 percent slide since its peak in June has led to a brutal sell – off in Nigerian assets, as investor’s flee what they perceive to be weak responses to an emerging crises made worse by economic mismanagement and corruption.

While almost all global oil producers grew their dollar reserves during the past four years as oil prices averaged above $100 per barrel (Angola for example almost doubled its reserves to $28 billion), Nigerian FX reserves actually fell for the period.

Compounding the negative effects of inexplicable fiscal leakages is a sense that the policy response to the current crisis has been amateurish and incapable of boosting investor confidence.

“Right now,Nigeria’s economic outlook is bleak. Not so much because of the twin global shocks, as sensible policy responses can mitigate the adverse effects of these, but much more because of the mediocre dual policy response,” said Ayo Teriba, an economist and CEO of Economic Associates, a research firm.

“Reducing government spending after all segments of the economy have suffered income losses is hardly positive for the outlook. Hiking the policy rate in that situation could only be a grave policy error on the part of the CBN,” Teriba said.

The finance ministry has proposed austerity measures for 2015, while the CBN has hiked its benchmark interest rate to 13 percent.

BusinessDay calculates that the sell-off in the NSE – All share index since its July peak has wiped off nearly N4.1 trillion in market capitalisation, equivalent to 89 percent of the 2014 Federal budget, leading to a negative wealth effect on household consumer spending.

One of the twin shocks mentioned by Teriba is foreign capital outflows by offshore investors.

Foreign outflow of funds from the NSE which eclipsed inflows in seven out of 10 months between January and October, reached a high of N101.22 billion in October 2014, more than double the October 2013 levels, data from the bourse show.

Standard Chartered estimates that foreign holdings of Nigerian T-bills and bonds are now below $6bn, down from $8.5bn in October 2014 and a high of $11.7bn in September 2013.

“Offshore bond investors are now largely underweight Nigerian bonds in their GBI-EM, while diversified portfolios have generally reduced exposure to duration in recent weeks or exited the market altogether,” Samir Gadio, Head of Standard Chartered Africa Strategy and FICC Research said in a December 08 note.

The Nigerian stock market has lost -24.84 percent this year, the naira is down -11 percent versus the green back, Nigerian dollar bonds have sold off with yields on Eurobond’s due July 2023 rising to a nine – month high of 6.13 percent on December 1, while the Finance Ministry cut growth outlook in 2015 by a percentage point.

Brent for January settlement slid $1.02, or 1.6 percent, to $62.66 a barrel on the London-based ICE Futures Europe exchange on Friday, the lowest since July 2009 trading, below Finance Minister Ngozi Okonjo – Iweala’s proposed $65 per barrel benchmark for the 2015 budget.

The non – passage of the Petroleum Industry Bill (PIB), despite the president’s party having a majority in congress, continued rolling blackouts after power privatisation, tough business environment, congested ports and stalled reforms mean there is no incentive for investors to return in the medium term.

The lack of fiscal buffers as a result of mismanagement, also mean that oil prices are having an outsized impact on an economy in which the non-oil GDP of N70 trillion made up 87 percent of total economic output of N80.9 trillion.

“Nigeria’s FX reserves are 97 percent of short term liabilities, compared to about 300 percent for EM peers,” said Bismarck Rewane, CEO of Financial Derivatives at a recent BusinessDay conference

Priceless24:
That is what everything is, propaganda. Including the so called promises, because that is all it takes that one chance. Isn't it what we gave to Jonathan? Where has it landed us?

I'm not campaigning for either of them, I just want to know why I should believe one is better than the other..

barcanista:
Inasmuch as I don't subscribe to election rigging, civil disobedience is never a decent way to reclaim mandate. The government, inec and police must do all they can to ensure a free, fair and credible election so as to avoid breakdown of law and order.

Priceless24:
Until these things actually happen they are nothing but empty promises.

tit:
Aaah pity fools like you.
why cant bughari find buyers for NNOC oil?
is it because shell and bp promised him a commission if he allow them to carry Nigeria share?

that is why he appoint david-west who also allow some foreigners to carry our oil for free because they give him gold wristwatch.
that is bughari way.
he will sell our patrimony for a plate of porridge, and 150 cows!